data report for the review of retirement income policies...my/our retirement, but i can afford...

Data report for the Review of Retirement Income Policies Prepared by Celestyna Galicki, Senior Research Analyst, Commission for Financial Capability, August

2019

Data sources

This report uses data from:

1) The Financial Capability Barometer 2018, a cross-sectional survey conducted by CFFC on an ongoing

basis.1 The survey is implemented by Dynata using an online panel. A sample from an online panel is

a non-probabilistic sample and the margin of error cannot be calculated.2 The panel members invited

to complete the survey are carefully selected to match the make-up of the adult New Zealand

population regarding age, gender, ethnicity and region. The mode (online) excludes those with no

internet access and those with low literacy levels, so the groups that are most socioeconomically

disadvantaged are likely to be underrepresented in the sample (compared to the New Zealand

population). Due to the limitations of this sampling method and mode, the data need to be interpreted

with caution and in the context of data of other sources, such as background papers for the Review

and data from Statistics New Zealand.

2) A survey of 18-64-year olds on KiwiSaver, separate to the Financial Capability Barometer but using

the same methodology, conducted by CFFC in April 2019 to cover questions specific to Terms of

Reference of the Review that were not covered by the Financial Capability Barometer.

3) Statistics New Zealand surveys and datasets, as listed in 4.1.

1. Income sources and hardship in retirement

1.1. Data

This section is based on responses from a sample of 1,077 retired respondents of the 2018 Financial

Capability Barometer survey. The sample has been selected from the Financial Capability Barometer

dataset based on (self-reported) retirement status. Only respondents who confirmed that they were

retired were asked further survey questions about their retirement income. It is important to note

that some respondents in the sample are less than 65 years old, and some respondents in the main

survey who were aged 65 and over were not retired and thus are not included in this report. The

1 Monthly (500 or 1000 respondents) or quarterly (2500 respondents) waves, contain a core questionnaire and

add-on modules on specific topics. The survey started in 2017 and has since accumulated more than 20,000

responses. 2 For a discussion of online panels and measurement error, see American Association for Public Opinion

Research, Report on Online Panels, available from https://www.aapor.org/Education-

Resources/Reports/Report-on-Online-Panels and Report on Non-Probability Sampling, available from

https://www.aapor.org/Education-Resources/Reports/Non-Probability-Sampling.aspx.

sample includes: 65 and over and retired: 844 cases and under 65 and retired: 233 cases. The 276

cases of respondents aged 65 or over and not retired were excluded from this analysis unless noted

otherwise.

1.2. Executive Summary

• Almost one in ten retirees (9%) report struggling to make ends meet

• 3 in 4 retired respondents supplement their main source of retirement income with another

source of income, such as savings, investments, selling of assets, money received from

family members etc.

• Those who do not report additional sources of income are more likely to struggle financially

• 18.5% of Māori report they struggle to make ends meet in retirement – a proportion twice

as high as among all respondents (9%). Māori are also more likely to rely on only one source

of retirement income (41%, compared to 26% in the overall population)

• Those relying on NZ Super as the only source of income have a lower rate of home

ownership (58%) than those who have other sources of income (87%).

• Home-ownership is the most important factor supporting financial wellbeing in retirement.

1.3. Sources of income in retirement

Respondents were asked about their main source of income (one choice) and additional sources of

income (multiple responses allowed).

70% of retired respondents rely on NZ Super as their main source of income (78.5% of retired

respondents who are 65 or over).

Savings (6%), other pension (5%) and income from a spouse or partner (3%) are the only other main

sources of retirement income reported by more than 2.5% of respondents. The remaining 16% of

respondents reported one of 13 other main sources of income (Table 1.1).

The most common sources of additional income are savings (49%), income from bond, stocks and

shares (20%) and KiwiSaver (18%).

Table 1.1. Main and additional sources of income in retirement % reporting as main source of income

% reporting as additional source of income*

NZ Super 70% 14% Other pension/super (teacher, veterans etc.) 5% 9% KiwiSaver . 18% Other retirement schemes (managed funds) . 11% Overseas government or state funded pension . 4% Overseas private or employer-based pension . 4% Savings 6% 49% Selling assets (car, art, jewellery antiques etc.) . 8% Selling or downsizing my house . 12% Inheritance or trust fund . 7%

Iwi Dividends . 3% Income from bonds, stocks and shares . 20% Property investments . 6% Rental income (from property you own) . 7% Support from children or other family members . 4% Income from a spouse or partner 3% 9% Working part time . 8%

. small sample size

* respondents could select multiple additional sources of income

About three quarters of retired respondents have at least one additional source of retirement income

and almost half have two or more additional sources of income (Table 1.2)3.

Table 1.2. Retired by number of sources of income Percent of retired No additional sources of income (main source only) 26.3% One additional source of income 25.3% 2-3 additional sources of income 31.9% Four or more extra sources of income 16.4%

1.4. Respondents who struggle to make ends meet in retirement

We asked respondents about their lifestyle in retirement (Table 1.3). Almost two thirds (64%) of

respondents report that they can afford extra spending on top of regular expenses (“I have enough

money to allow me to do all the things I want in retirement” or “I can't do all the things I want in

my/our retirement, but I can afford spending and some luxuries on top of the basics”).

Almost one in ten retirees (8.9%) reported that they struggle to make ends meet. Among those with

no additional sources of retirement income to supplement their main source of income, one in five

(20.5%) are struggling.

Those with NZ Super as the sole source of income (21% of the sample) are much more likely to report

that they are struggling (19.5%) compared to those who do not rely on NZ Super as the only source of

income (Table 1.4). However, half of those relying on NZ Super as the sole source of income are

managing their expenses “fairly well” and 31% report that they can do “all the things they want” or

“can afford luxuries on top of the basics”. This diversity in satisfaction with lifestyle on New Zealand

Super suggests that there are factors other than income that contribute to lifestyle in retirement.

Based on information from focus groups conducted by Ipsos for CFFC, such non-income factors that

contribute to wellbeing in retirement include home ownership, the local cost of living, expenditure

levels (often affected by health needs) and the level of social support.

3 The Barometer question about sources of retirement income uses a broader definition of income than Statistics

New Zealand and includes informal sources such as help from family or drawing on savings. These are not

captured by the list of income sources used by Statistics New Zealand (LEED Annual Table 1.1. Sources of taxable

income), which includes wages and salaries, self-employment, paid parental leave, accident compensation,

student allowance, income tested benefits and New Zealand Superannuation. As a result, CFFC’s estimate of the

proportion of retirees relying exclusively on NZ Super is lower than that of Statistics New Zealand.

Table 1.3. Which of these statements best describes your [and your partner's] lifestyle in retirement?

All respondents

Number of secondary sources of income 0 1 2-3 4+

I have enough money to allow me to do all the things I want in retirement

8.8% 26.4% 30.4% 41.2% 24.7%

I can't do all the things I want in my/our retirement, but I can afford spending and some luxuries on top of the basics

27.2% 42.1% 46.6% 48.0% 39.6%

I don't have the money to do the things I want in retirement, but I'm managing regular expenses fairly well

43.5% 24.9% 20.9% 9.6% 26.8%

I'm struggling to make ends meet in retirement 20.5% 6.6% 2.1% 1.1% 8.9%

Total 100.0% 100.0% 100.0% 100.0% 100.0%


NZ Super is not the sole source of

income

NZ Super is the sole source of

income I have enough money to allow me to do all the things I want in retirement

34.1% 5.8%


43.9% 25.3%


18.6% 49.5%

I'm struggling to make ends meet in retirement 3.4% 19.5% Total 100.0% 100.0%

Those relying on NZ Super as the only source of income have a lower rate of home ownership (58%)

than those who have other sources of income (87%) (Table 1.5). This reflects the accumulation of

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Retired - no extra sources

Retired - one extra source

Retired - 2-3 extra sources

Retired - 4 or more extra sources


I can't do all the things I want in my/our retirement, but I can afford spending and some luxuries on top of

the basics


I'm struggling to make ends meet in retirement

advantage – many of those who were able to buy a house were also able to build other income-

producing assets.

Table 1.5. Difference in home ownership by NZ Super as the sole source of income

NZS not the sole source of income

NZS is the sole source of income

Total retired

Not Home Owner 13.1% 42.3% 19.1% Home Owner 86.9% 57.7% 80.9% 100.0% 100.0% 100.0%

The above data suggest that additional sources of retirement income are important for making ends

meet in retirement. Nonetheless, among retirees who are 65 and over, most of those with additional

sources of income receive a substantial part of their overall income from NZ Super (Table 1.6). This

means that, on average, the income from additional sources is low.

Table 1.6. Approximately what percentage of your income currently comes from NZ Super? (retired 65 and over)

% of those with 2 income sources

% of those with 3-4 income sources

% of those with 5+ income sources

75% or more 69% 49% 29% 60-74% 7% 20% 16% 35-59% 13% 22% 30% 33% or less 7% 9% 23% Total 100% 100% 100%

Most retirees report personal and household income under NZ$ 50,000 pa. Only 7% of retirees

report a personal income over $100,000 per year and 18% report household income over $100,000

per year (Table 1.7).4

Table 1.7. Personal and household income by number of sources of income.

Personal income 1 source of income

2 sources of income

3-4 sources of income

5+ sources of income Total

not stated 19.4% 14.7% 17.7% 15.3% 17.0% under 50k 78.4% 76.9% 72.1% 65.0% 73.8% 50-100k 2.1% 7.0% 9.3% 13.0% 7.4% over 100k 1.5% 0.9% 6.8% 1.8% Total 100.0% 100.0% 100.0% 100.0% 100.0% Household income not stated 22.6% 14.3% 17.2% 16.9% 17.8% under 50k 67.5% 60.8% 55.5% 36.2% 56.8% 50-100k 6.7% 18.7% 20.6% 28.8% 17.8% over 100k 3.2% 6.2% 6.7% 18.1% 7.5% Total 100.0% 100.0% 100.0% 100.0% 100.0%

4 Income data need to be interpreted with caution, because between 17 to 18% of retirees did not state their

income (refused to answer the question or responded “I don’t know”). The question also did not define

“income” and it is not clear, for example, if respondents included the amounts they draw down from their

savings as income or not.

18.5% of Māori report they struggle to make ends meet in retirement compared to 7.1% of non- Māori

(Table 1.8).5 Māori are also more likely to rely on only one source of income (41%, compared to 25%

of non- Māori (Table 1.9)).


Non-Māori Māori


27.8% 20.0%


40.3% 29.2%


24.8% 32.3%


Table 1.9. Māori compared to non-Māori by number of additional sources of retirement income.

Non-Māori Māori

No additional sources of income (main source only) 25.3% 41.5% One additional source of income 26.0% 15.4% 2-3 additional sources of income 32.4% 24.6% 4 or more additional sources of income 16.3% 18.5% Total 100.0% 100.0%

Those who have retired and are under 65 years old reported struggling to make ends meet more often

(12%) compared to those aged 65 and over (7%). This suggests that some of those under 65 who

struggle in retirement might have retired early not by choice but due to failing health or inability to

find employment (Table 1.10). New Zealand does not have a mandatory retirement age, but the age

of eligibility for New Zealand Superannuation (65 years) is often used as the cut-off age for “retired”

or “older” New Zealanders.6 However, financial vulnerability in retirement may also affect those who

retire before 65 and more research is needed on those who exit the workforce earlier.

Table 1.10. Financial wellbeing in retirement by age. 65 or over and retired

Under 65 and retired


27.9% 24.8%


39.8% 38.8%


25.4% 24.8%


5 Respondents could select more than one ethnicity they identify with. In this report, Māori are defined as those

who selected Māori as their sole ethnicity or one of their ethnicities. (The author is aware that Māori is a descent

rather than an ethnicity, however, the survey questionnaire described Māori as an ethnicity). 6 For an example of this approach see “The material wellbeing of older New Zealanders: background paper for

the Retirement Commissioner’s 2013 review” by Bryan Perry, Ministry of Social Development, 5 August 2013.

Non-homeowners are almost 5 times as likely to struggle in retirement than home-owners, and

when controlling for home ownership, variables like gender, Maori or Pacific ethnicity and location

are not significant.7 This means that supporting home-ownership is one of the most impactful ways

of reducing financial vulnerability in retirement.

2. KiwiSaver

2.1. Data

This section uses data from two sources:

1) Responses from respondents aged 18-64 (7,482 respondents in total) from the Financial Capability

Barometer (see 0.1. Data Sources above). This dataset is referred to as FCB.

2) Data from a survey of 2,046 New Zealanders aged 18-64 conducted in April 2019, focused on

KiwiSaver and views on ethical investment and KiwiSaver fees. This dataset is referred to as KS.

2.2. Executive summary

• 77.4% of respondents aged 18-64 were KiwiSaver members. KiwiSaver membership was

highest in the 18-33 age group (82.9%).

• Men and women had a similar rate of KiwiSaver membership

• Employment was the strongest predictor of being a contributing KiwiSaver member and was

more important than age, gender and ethnicity

• 40% of respondents not in KiwiSaver did not enrol due to a lack of, or insufficient, income

• those who are employed, home-owners, work in professional occupations and live in urban

areas are more likely to be enrolled to KiwiSaver and making contributions. This leads to the

question whether those who need KiwiSaver the most are those who use it.

• Performance was the main criterion for fund selection, selected by over 60% of respondents

who selected their own fund. Fees (36%) and risk level (31%) were the other two most

important factors when selecting a fund.

2.3. KiwiSaver membership and contributions

77.4% of respondents aged 18-64 were KiwiSaver members, and 59% of all respondents aged 18-64

(76% of KiwiSaver members) were making contributions (Table 2.1).

Table 2.1. (KS) Are you in KiwiSaver? Frequency Percent Yes, I'm in KiwiSaver and I'm making contributions 1212 59.2 Yes, I'm in KiwiSaver, but I am not making contributions 373 18.2 No, I'm not in KiwiSaver 461 22.5 Total 2046 100.0

7 The regression analysis in the technic al appendix separate to this document.

KiwiSaver membership was highest in the 18-33 age group (82.9%). This age group also had the

highest percentage of non-contributing members (20.1% of all respondents in this age group and

25% of KiwiSaver members in this age group) (Fig. 2.2.). Within the 18-33 age group, the non-

contributors were, on average, younger than contributors. Based on these demographics, we may

assume that their non-contributing status was in many cases due to full time study and limited

income.

Fig.2.2. KiwiSaver membership by age group (KS).

Men and women had a similar rate of KiwiSaver membership (76.4 % of men and 78.5% of women in

the sample were KiwiSaver members), but women were more likely than men to be non-

contributing members (20.7% of women and 15.4% of men in the sample were in KiwiSaver but not

contributing) (Fig. 2.3.). This difference is probably linked to (1) women taking time off work for

childrearing and caregiving at a greater rate than men and (2) women working in low-paid

occupations at a higher rate than men.8

8 https://www.stats.govt.nz/news/women-in-paid-work; https://teara.govt.nz/en/gender-inequalities/page-4

62.8% 61.2%

53.5%

20.1%17.1% 17.7%17.1%

21.8%28.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

18-33 34-49 50-65

KiwiSaver membership by age group

Yes, I'm in KiwiSaver and I'm making contributions

Yes, I'm in KiwiSaver, but I am not making contributions

No, I'm not in KiwiSaver

Fig. 2.3. KiwiSaver membership by gender (KS).

Employment was the strongest predictor of being a contributing KiwiSaver member and was more

important than age, gender and ethnicity. Of those employed, 75.3% were in KiwiSaver and making

contributions, compared to 29.1% of those not in employment (Table 2.2).9

Table 2.4. KiwiSaver membership by employment status (KS)

Not employed (includes contractors, self-employed

and business owners)

Employed Total

Yes, I'm in KiwiSaver and I'm making contributions 29.1% 75.3% 59.2% Yes, I'm in KiwiSaver, but I am not making contributions

36.3% 8.6% 18.2%

No, I'm not in KiwiSaver 34.6% 16.1% 22.5% 100.0% 100.0% 100.0%

This link between contributing to KiwiSaver and being employed reflects KiwiSaver’s employee-

focused design. Auto-enrolment, automatic contributions and employer contributions are available

only for those who are employed. Self-employed/contractors, business owners, stay-at-home parents,

students and beneficiaries are excluded from these benefits, although they can choose to make their

own contributions. Data suggest that many of them do not make their own contributions, due to

insufficient income, lack of information or lack of motivation (for employees, the lack of motivation is

effectively addressed by the automation of enrolment and contributions).

Data from the Financial Capability Barometer confirms that those who are employed, home-owners,

work in professional occupations and live in urban areas are more likely to be enrolled to KiwiSaver

9 Employment is defined as full-time or part-time employment and does not include self-employment, contract

work or working in own business.

61.0%

57.8%

15.4%

20.7%

23.6%

21.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Male

Female

Yes, I'm in KiwiSaver and I'm making contributions


No, I'm not in KiwiSaver

and making contributions (Fig. 2.5-2.12). This leads to the question whether those who need

KiwiSaver the most are those who use it.

Fig. 2.5. KiwiSaver status within ethnic groups (FCB)

Fig. 2.6. KiwiSaver status within tenure types (FCB)

48.7%

50.8%

55.4%

66.5%

59.0%

61.5%

46.4%

24.2%

26.0%

20.0%

13.3%

11.3%

13.1%

16.9%

27.1%

23.2%

24.7%

20.2%

29.7%

25.3%

36.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Maori

Pacific Island

European

Chinese

Indian

Other Asian

Other

In KiwiSaver and contributing In KiwiSaver and not contributing Not in KiwiSaver

65.0%

61.5%

46.8%

45.1%

31.0%

15.5%

14.6%

23.8%

21.9%

32.2%

19.5%

24.0%

29.4%

33.0%

36.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

I live in my own home with a mortgage

I live in my own home without a mortgage/freehold

I live in a rented home/flat

I live with my parents/guardians

Something else (rent free, boarding house, hostel etc.)


Fig. 2.7. KiwiSaver status within urban/rural locations (FCB)

Fig. 2.8. Contributing KiwiSaver members - percentages within occupations (FCB)

56.5%

47.9%

18.9%

22.0%

24.6%

30.1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Urban

Rural


13.9%

25.4%

31.0%

35.9%

37.3%

59.0%

61.3%

63.9%

64.2%

64.5%

66.0%

66.7%

71.5%

72.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

I'm currently not in formal employment

Home-maker/stay at home mum/dad

Student

Retired

Farming, fishing, horticulture

Labourer, manual worker

Technician or Trades

Sales or Retail

Machinery Operator / Driver

Semi-skilled worker

Manager

Community or Personal Service (carers, hospitality,…

Clerical or Administrative

Professional (business, IT, HR, engineering, design,…

Fig. 2.9. Percentages within occupations who are enrolled in Kiwisaver (contributing or not) (FCB)

Fig. 2.10. KiwiSaver status by employment status (FCB).

57%

59%

64%

64%

65%

73%

75%

76%

79%

79%

79%

81%

82%

83%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

I'm currently not in formal employment

Retired

Farming, fishing, horticulture

Home-maker/stay at home mum/dad

Student

Labourer, manual worker

Machinery Operator / Driver

Technician or Trades

Sales or Retail

Manager

Semi-skilled worker

Community or Personal Service (carers, hospitality,…

Clerical or Administrative

Professional (business, IT, HR, engineering, design,…

15.5%

16.5%

21.0%

22.4%

43.7%

61.6%

74.0%

42.9%

40.4%

47.3%

37.0%

22.7%

16.7%

8.9%

41.6%

43.1%

31.7%

40.6%

33.6%

21.6%

17.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Not employed and unavailable for work

Not employed and available for work

Parent or parental leave

Doing unpaid voluntary work

Self-employed/ contractor/ running your own business

Employed part-time (less than 30 hours per week in

paid employment)

Employed full-time (more than 30 hours per week in

paid employment)

KiwiSaver status by employment status


Fig. 2.11. KiwiSaver status by personal income (FCB)

Fig. 2.12. KiwiSaver status by household income (FCB)

Questions related to hardship and income volatility were asked in selected waves of the survey

(FCB). The responses suggest that being enrolled in KiwiSaver but not contributing is more correlated

with financial hardship and income volatility than not being enrolled at all (Fig. 2.13-2.15). Data from

the previous section shows that there may be many reasons for non-enrolment, some of which are

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Under $10,000

More than $10,000 but less than $20,000








More than $200,000

I'd prefer not to answer

I'm not sure

KiwiSaver status by personal income


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Under $10,000









More than $200,000

KiwiSaver status by household income


not related to hardship; for example, having another superannuation scheme or other investments,

on not having entered the workforce yet.

Fig. 2.13. KiwiSaver status by self-assessed employability (FCB)

Fig. 2.14. KiwiSaver status by borrowing to meet living costs (FCB)

27.8%

65.5%

62.2%

50.4%

46.0%

34.3%

19.0%

11.2%

15.9%

21.5%

25.3%

28.6%

53.2%

23.3%

21.9%

28.1%

28.7%

37.1%

0% 20% 40% 60% 80% 100%

Not applicable

Strongly agree

Agree

Neutral

Disagree

Strongly disagree

I could easily find a job or another job if I wanted

to (N=1763)


46.9%

58.8%

28.1%

15.1%

25.0%

26.1%

0% 20% 40% 60% 80% 100%

Yes

No

In the last 12 months have you borrowed to meet

everyday living costs? (N=3030)


Fig. 2.15. KiwiSaver status by variability of household income (FCB).

2.4. Reasons for not being in KiwiSaver

Respondents who were not in KiwiSaver were asked why they are not in KiwiSaver. 40% of the

reasons given by respondents were due to a lack of, or insufficient, income. Other common reasons

were having other investments (selected mostly by older respondents) and lack of knowledge about

KiwiSaver (Table 2.16).

Table 2.16. What are the reasons you are not in KiwiSaver? [Base: respondents who are not in KiwiSaver]; respondents could select more than one answer (KS) Frequency Percent I have an income, but I cannot afford KiwiSaver 101 21.9% I have other savings/investments that will secure a comfortable retirement for me

90 19.5%

I do not know enough about KiwiSaver 88 19.1% I have currently no income 82 17.8% Don't feel comfortable with the risk 63 13.7% Other (please specify) 61 13.2% I am afraid that the government may change the rules to the disadvantage of KiwiSaver members

54 11.7%

Have never been employed 24 5.2% KiwiSaver fees are too high 21 4.6% My preferred investments options are not available in KiwiSaver 18 3.9% Total 461 >100.0

Among the 13% of respondents who selected “other” reasons, the most common explanation was

that they were not eligible due to non-resident status (the survey did not exclude respondents on

temporary visas). Other reasons included advice from accountant or being too close to retirement to

benefit from signing up.

0% 20% 40% 60% 80% 100%

Is stable

Varies a bit

Varies a lot

How much does your household income vary?

(N=1763)


Older respondents (50-64 years old) were more likely to select the response “I have other

savings/investments” than younger age groups, whereas lack of knowledge was the top reason

selected by those aged 18-33 (Fig. 2.17).

Fig. 2.17. Reasons respondent not in KiwiSaver, by age group (KS)

Male respondents were more likely to select “I have other savings/investments…” as a reason for

not being in KiwiSaver (24%), compared to women (14.5%).10 This is consistent with the ANZ

Financial Wellbeing Survey which has found that women are less likely than men to hold

investments.

10 The difference is statistically significant at the 0.05 level.

I have other savings/investments that will secure a

comfortable retirement for me , 9.0%

I have other savings/investments that will secure

a comfortable retirement for me , 14.8%

I have other savings/investments that will secure

a comfortable retirement for me , 29.8%

I do not know enough

about KiwiSaver ,

28.8%


about KiwiSaver ,

24.7%


about KiwiSaver , 8.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

18-33

34-49

50-64

Have never been employed

I have currently no income

I have an income, but I cannot afford KiwiSaver

I am afraid that the government may change the rules to the disadvantage of KiwiSaver members

Don't feel comfortable with the risk

I have other savings/investments that will secure a comfortable retirement for me

KiwiSaver fees are too high

My preferred investments options are not available in KiwiSaver

I do not know enough about KiwiSaver

2.5 Selecting a KiwiSaver fund

The majority (75%) of respondents who are in KiwiSaver selected their fund. There is little difference

between age groups – those aged 50 and over are slightly more likely to have selected their fund.

Table 2.17. Did you select your KiwiSaver fund? [Base: respondents in KiwiSaver] (KS)

Frequency Percent

No, I'm in the default fund / Don't know 393 24.8% Yes 1192 75.2% Total 1585 100.0%

Fig. 2.18. KiwiSaver fund selection by age group (KS).

Performance was the main criterion for fund selection, selected by over 60% of respondents who

selected their own fund. Fees (36%) and risk level (31%) were the other two most important factors

when selecting a fund (Table 2.19). Fees were more important for the 18-33 age group than for older

respondents (Table 2.20).

Table 2.19. What was most important for you when choosing the KiwiSaver fund? [Base: respondents who selected their KiwiSaver fund] Respondents could select up to 3 answers (KS) Frequency Percent Performance (returns) 730 61.2% Fees 433 36.3% Risk level 374 31.4% Confidence in the fund manager 293 24.6% Ethical investment 132 11.1% Recommendation from a financial advisor 131 11.0% Communication 110 9.2% Recommendation from someone else 82 6.9% Other 82 6.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

18-33 34-49 50-65

Did you select your KiwiSaver fund? % of age group

No, I'm in the default fund / Don't know Yes

Advertising 6 0.5% Total 1192 >100.0%

Table 2.20. What was most important for you when choosing the KiwiSaver fund? [Base: respondents who selected their KiwiSaver fund] Respondents could select up to 3 answers]

18-33 years

34-49 years

50-65 years

Fees 40.9% 37.4% 30.2% Performance (returns) 59.1% 64.7% 59.5% Ethical investment 13.8% 10.4% 9.0% Communication 9.8% 8.9% 9.0% Confidence in the fund manager 17.3% 22.6% 34.8% Risk level 31.1% 30.1% 33.2% Recommendation from a financial advisor 12.5% 9.9% 10.6% Recommendation from someone else 8.8% 5.2% 6.8% Advertising 1.0% 0.5% 0.0% 100.0% 100.0% 100.0%

2.6. Profiles of non-contributing members

• 21% of women are in KS but not contributing, compared to 15% of men

• Non-contributing (while being enrolled in KiwiSaver) is highest in the 18-33 age group (20%

of this age groups is enrolled but not contributing)

• 54% of people who fulfil all of the following conditions are enrolled but not contributing: 11

not employed, living in own home with a mortgage and being a stay at home parent or

carer. The majority of such respondents are female. These respondents probably have an

employed spouse (the household can afford a mortgage). Being a stay at home parent while

not contributing to KiwiSaver disadvantages women because they miss out on the

government contribution. One respondent wrote in an open-ended comment field that she

counts on her husband’s KiwiSaver to get by.

• 47% of people who fulfil all of the following conditions: unemployed, renting and aged 18-34

years are in KiwiSaver but not contributing (non-employed renters 35+ are more likely to not

be in KiwiSaver at all - 43% of them are not enrolled). Employment and related income seem

to be the biggest factor here; however, much of this group is likely to be between jobs or

studying and may restart their contributions when they return to paid employment.

• Out of those who are employed, Maori employed part-time have the highest rate of non-

contributing - 28% not contributing (compared to 11% of non-Maori who are employed part

time). This may reflect lower wages, fewer hours or having family commitments which make

contribution unfeasible.

11 CHAID algorithm was used to identify these profiles.

3. Public opinion on Kiwisaver fees and ethical investment in KiwiSaver

3.1. Data

The source of data for this section is the KiwiSaver survey (KS) of 2,046 New Zealanders aged 18-64

conducted by the Commission in April 2019.


• Fees matter, especially for younger KiwiSaver members:

o For over one third of KiwiSaver members (36%), fees are important when selecting a

KiwiSaver fund

o Fees are important for 41% of 18-33 year olds when selecting a KiwiSaver fund

o Fees are the second most important consideration when selecting a KiwiSaver fund

(after fund performance)

• A majority support capping KiwiSaver fees o More than half of respondents (55%) support a fee cap for all KiwiSaver funds, and a

further 12% support a fee cap for default funds only

• Fees are important for those already enrolled but are not a barrier to joining o Despite the importance of fees for current KiwiSaver members, less than 5% of

KiwiSaver non-members indicated fees as a reason why they are not in KiwiSaver

• Ethical investment is important o Only 26% overall, and 18% of contributing KiwiSaver members, are NOT interested

at all in ethical investment

• Animal cruelty, worker exploitation, whaling and pornography topped the list of activities that respondents would like to see excluded from what an ethical investment fund invests in

o Each of the above activities was expected to be excluded by over 70% of

respondents

o Nuclear power, pornography and fossil fuels were rejected by female respondents at

a much higher rate than by male respondents

o Younger respondents rejected investment in fossil fuels at a higher rate than older

respondents.

• A majority are satisfied with available ethical investment options within KiwiSaver, but women and ethnic minorities are less satisfied

o Among those in KiwiSaver and contributing, 70% were satisfied with the range of

ethical investment options

o This high level of satisfaction is a surprise because most ethical investment funds do

not meet the expectations reported by survey participants

o Female respondents show higher levels of dissatisfaction with available ethical

investment options compared to sample average. Of those dissatisfied with ethical

investment options, 64% are female.

o Maori and Pacific respondents also show higher levels of dissatisfaction with

available ethical investment options, but these data need to be interpreted with

caution due to small sample sizes

3.3. Opinion on KiwiSaver fees

Table 2.20 shows that fees and ethical investment were more important for 18-33-year olds

choosing their KiwiSaver fund than for respondents in older age groups:

However, for those not in KiwiSaver, the main barriers to joining KiwiSaver did not include fees or

limited investment options. Instead, unaffordability, having other retirement savings and lack of

knowledge were the top three reasons why respondents did not join KiwiSaver (Table 3.1):

Table 3.1. What are the reasons you are not in KiwiSaver? [Base: respondents who are not in KiwiSaver] Respondents could select more than one answer

No. of respondents

Percent

I have an income, but I cannot afford KiwiSaver 101 21.9% I have other savings/investments that will secure a comfortable retirement for me

90 19.5%

I do not know enough about KiwiSaver 88 19.1% I have currently no income 82 17.8% Don't feel comfortable with the risk 63 13.7% Other 61 13.2% I am afraid that the government may change the rules to the disadvantage of KiwiSaver members

54 11.7%

Have never been employed 24 5.2% KiwiSaver fees are too high 21 4.6% My preferred investments options are not available in KiwiSaver 18 3.9% Total 461 100%

A flat fee was the most supported fee option among respondents who are enrolled in KiwiSaver.

44% of these respondents preferred it over a percentage fee (13%) or a combination of both (20%)

(Table 3.2):

Table 3.2. When selecting a KiwiSaver fund, do you prefer a flat fee, percentage of balance fee or a combination of both? [Base: those in KiwiSaver]

No. of respondents

Percent

A flat fee (everyone pays the same amount) 695 43.8% A percentage fee (people who have higher KiwiSaver balance pay more) 212 13.4%

A combination of flat and percentage fee 309 19.5% No opinion 369 23.3% Total 1585 100%

More than half of respondents (55%) support a fee cap for all KiwiSaver funds, and a further 12%

support a fee cap for default funds only (Table 3.3):

Table 3.3. Should there be a KiwiSaver fee cap? [Base: those in KiwiSaver]

No. of respondents

Percent

No - after-fee returns are what matters 353 22.3% No, fund managers have the right to set their fees 166 10.5% Yes, but only for default providers 186 11.7% Yes, for all KiwiSaver funds 880 55.5% Total 1585 100%

Those aged 50-64 were more likely to support a fee cap on all funds, and those aged 18-33 a fee cap

for default providers only. Younger respondents were more likely to be against a fee cap, compared

to older respondents. Fees matter to the 18-33 age group more than for older age groups but the

18-33 age group is also more likely to agree to leave fees to the market (Table 3.4.):

Table 3.4. Should there be a KiwiSaver fee cap? 18-33 years 34-49 years

50-65 years

Total

No - after-fee returns are what matters 25.6% 22.0% 18.8% 22.3% No, fund managers have the right to set their fees 16.3% 8.6% 6.0% 10.5%

Yes, but only for default providers 15.9% 11.0% 7.8% 11.7% Yes, for all KiwiSaver funds 42.2% 58.4% 67.4% 55.5% Total 100.0% 100.0% 100.0% 100.0%

3.4. Opinion on ethical investment

Animal cruelty, worker exploitation, whaling, pornography and weapons topped the list of activities

that respondents would like to see excluded from an ethical investment fund (Table 3.5). There were

differences by age and sex. For example, younger respondents were more likely to want to exclude

fossil fuels, compared to older respondents (Table 3.6).

Table 3.5. What do you expect from an ethical investment fund to NOT invest in? Respondents could select any number of answers

No. of respondents

Percent

Animal cruelty 1602 78.3% Companies that exploit workers / break labour laws 1550 75.8% Whaling 1499 73.3% Pornography 1482 72.4% Any weapons 1310 64.0% Gambling 1300 63.5% Military weapons 1297 63.4% Tobacco 1281 62.6% Nuclear power 1086 53.1% Alcohol 877 42.9% Fossil fuels 833 40.7% Genetic engineering 755 36.9% Other 57 2.8%

Table 3.6. What do you expect from an ethical investment fund to NOT invest in? Respondents could select any number of answers

18-33 yrs

34-49 yrs

50-65 yrs

Military weapons 54.4% 65.2% 70.4% Any weapons 58.8% 63.6% 69.7% Tobacco 58.7% 63.0% 66.1% Alcohol 44.5% 41.7% 42.5% Gambling 62.5% 62.5% 65.7% Nuclear power 53.6% 54.7% 50.7% Animal cruelty 74.0% 78.1% 82.8% Fossil fuels 45.9% 41.8% 34.3% Whaling 67.1% 75.7% 76.7% Pornography 67.0% 70.3% 80.3% Companies that exploit workers / break labour laws 71.0% 74.3% 82.2% Genetic engineering 30.0% 39.9% 40.4%

Female respondents were more likely than male respondents to exclude any of the listed activities.

In particular, nuclear power, pornography and fossil fuels were rejected by female respondents at a

much higher rate than by male respondents (Table 3.7):

Table 3.7. What do you expect from an ethical investment fund to NOT invest in?

Male Female Difference (F-M)

Nuclear power 41% 64% 24% Pornography 63% 81% 18% Fossil fuels 31% 49% 18% Gambling 56% 70% 14% Alcohol 35% 49% 14% Genetic engineering 30% 43% 13% Any weapons 57% 70% 13% Military weapons 58% 68% 10% Companies that exploit workers / break labour laws 70% 80% 10% Animal cruelty 73% 83% 9% Tobacco 58% 66% 8% Whaling 69% 77% 7%

More than half of respondents were satisfied with the range of ethical investment options available

in KiwiSaver. Among those in KiwiSaver and contributing, 70% were satisfied with the range of

ethical investment options. This is a surprise in the light of high standards for ethical investment,

revealed by the data above: most ethical investment funds do not meet these standards. Of those

dissatisfied with ethical investment options available, 64% are female (Table 3.8).

Total 2046 >100%

Table 3.8. Are you satisfied with the range of ethical investment options offered by KiwiSaver providers?

Yes, I'm in KiwiSaver and

I'm making contributions


No, I'm not in

KiwiSaver

Overall

Yes 69.5% 57.9% 34.1% 59.4% No 12.1% 19.3% 19.1% 15.0% Not interested in ethical investment 18.4% 22.8% 46.9% 25.6% Total 100.0% 100.0% 100.0% 100.0%

Only 26% of all respondents (and 18% of contributing KiwiSaver members), are not interested at all

in ethical investment. This suggests that the overwhelming majority of KiwiSaver members are

interested in ethical investment. However, only a minority selected ethical investment when asked

about the criteria for selecting a fund. A possible explanation is that respondents show social

desirability bias (select the “right” answer) when asked about ethical investment directly, but their

actual behaviour shows limited consideration of ethical investment in KiwiSaver funds.

4. Assets, liabilities and labour force participation

4.1. Data sources

This section uses data from the Household Economic Survey, Labour Force Survey and Linked

Employer-Employee Dataset (Statistics New Zealand), including customised data requests from CFFC

to Statistics New Zealand.


• Net worth data shows a concentration of high asset values among a minority of respondents

• Net worth increases with age, as people accumulate assets and pay down debt. Those aged

65-74 years have the highest average net worth (NZ$ 770,000).

• Over the last 3 years, there has been a decline in the mean average worth of 15-34-year olds

• The age when people first purchase property has been slowly increasing.

• 11% of people aged 65-74, and 4% of those aged 75 and over, still have a mortgage.

• Among those aged 65 and over, those who rate their health better tend to have higher net

worth.

• 5.7% of NZ households owe more than they own

• The two groups with the lowest net wealth were single-parent households with dependent

children, and renters.

4.3. Individual net worth – average and median assets and liabilities

The table below shows a breakdown of mean and median values of individual assets and liabilities in

New Zealand, 2018. Mean values (arithmetic averages) are, for all assets and liabilities, higher than

median values (values separating the higher half from the lower half). This means that a small number

of individuals have very high values of assets and/or liabilities; this applies especially to financial

assets, such as shares and business equity. Because of this concentration of high asset values among

a minority of respondents, the average values do not represent the “average New Zealander”.

The mean net worth is NZ$ 359,000, and the median net worth is NZ$ 92,000.

Table 4.1. Individual assets and liabilities

Median value (thousands of dollars) for those who have this asset/liability

Mean value (thousands of dollars) for those who have this asset/liability

What % of population have this asset

population mean (mean value (thousands of dollars) per person including those who do not have this asset/liability)

Assets Owner-occupied dwellings 267 333 39% 129 Other real estate 229 345 9% 32 Consumer durables 30 44 91% 40 Valuables 7 18 20% 4 Total non-financial assets 104 224 91% 205 Currency and deposits 3 29 94% 28 Bonds and other debt securities 12 106 1% 1

Equity in own unincorporated enterprises 50 313 4% 12

Total shares and other equity 213 740 18% 132

Mutual funds and other investment funds 48 155 5% 7

Life insurance funds and annuities 34 67 3% 2 Pension funds 15 37 52% 19 Other household financial assets 15 117 7% 8 Total financial assets 17 217 97% 210 Total individual assets 168 421 98% 414 Liabilities Owner-occupied residence loans 122 151 24% 36 Other real estate loans 177 244 5% 12 Consumer durable loans 1 2 9% 0 Education loans 15 21 14% 3 Other loans and liabilities 2 9 46% 4 Total individual liabilities 21 86 64% 55 Total individual net worth 92 359 100% 359

4.4. Age and net worth

Net worth increases with age, as people accumulate assets and pay down debt. Those aged 65-74

years have the highest average net worth (NZ$ 770,000). Past this age, average net worth declines as

people gradually spend their savings in retirement. Nonetheless, the eldest New Zealanders (75+)

still have relatively high average net worth of NS$ 588,000.

Over the last 3 years, there has been a decline in the mean average worth of 15-34-year olds, and an

increase in the average net worth of those 35 and older. This suggests that younger people’s wealth-

building is delayed in time compared to 2015 (Table 4.2).

Table 4.2. Individual net worth by age group

Age group Mean (dollars) % change 2015-2018

15–24 7,000 -26.9

25–34 81,000 -15.3

35–44 245,000 11.1

45–54 476,000 23.6

55–64 668,000 20.3

65–74 770,000 37.9

75+ 588,000 18.5

The percentage of people owning assets in different age groups shows that the rate of home

ownership increases sharply in the 35-44 age group, compared to younger age groups, and then slowly

increases with age.

The age when people first purchase property has been slowly increasing. In 2018, the overall median

age when person first acquired property was 26 years and 7 months old. This median age of

acquiring the first property is higher within younger age groups.

• 50% of homeowners aged 65-74 years acquired their first property before they were 26

years 4 months old


years 8 months old


years 1 month old


years 7 months old

Ownership of other real estate peaks in the 55-64-year-old group, at 15%, and then declines (which

may be linked to decumulation in retirement). The percentage of those with a mortgage is highest in

the 35-54 age group and then declines. However, 11% of people aged 65-74, and 4% of those aged 75

and over, still have a mortgage.

Older people have mostly paid off their mortgages, other real estate loans and education loans, but

46% of 65-74-year olds and 31% of 75+ year olds have “other loans and liabilities”. This is likely to be

consumer debt, such as credit card balances. The percentages of those who have such debt within

these age groups may seem high, but the average value of these debts is only NZ$ 5,000, which should

not be a burden considering the high net worth of these age groups (Table 4.3).

Table 4.3. Percentage of people within age group who report that they

have the asset/liability

15–24 25–34 35–44 45–54 55–64 65–74 75+

Assets Owner-occupied dwellings 2% 22% 43% 53% 55% 59% 59% Other real estate 1% 6% 11% 13% 15% 13% 8% Other non-financial assets 64% 94% 98% 98% 98% 98% 95% Total non-financial assets 64% 94% 98% 98% 98% 98% 95% Currency and deposits 89% 96% 95% 94% 95% 97% 98% Pension funds 50% 65% 62% 60% 57% 26% 9% Other household financial assets 6% 17% 27% 38% 45% 46% 35% Total financial assets 91% 98% 98% 98% 98% 99% 98% Total individual assets 93% 99% 100% 100% 100% 100% 100% Liabilities Owner-occupied residence loans 2% 21% 42% 44% 30% 11% 4% Other real estate loans - 4% 7% 9% 7% 3% 1% Education loans 33% 29% 14% 5% 3% 1% 1% Other loans and liabilities 19% 53% 65% 63% 57% 46% 31% Total individual liabilities 44% 73% 82% 78% 68% 53% 33%

4.5. Ethnic inequalities in net worth

Net worth is correlated with age and life stage. Maori and Pacific Islanders have younger populations,

so we would expect their net worth to be lower. However, Statistics New Zealand provided us with

age-standardised data (net worth recalculated as if each ethnic group had the same age structure)

and even then, ethnic disparities are evident. (Fig 4.5 and Table 4.6).

Fig. 4.5. Median age standardised values of housing equity and mortgage debt by ethnicity.

210

158

207

236

193

98 96107

130

85

0

50

100

150

200

250

European Māori Pacific peoples Asian Other ethnic

group

Median (age-standardised) values - housing

equity and mortgages (thousands of NZ$)

Owner-occupied dwellings Owner-occupied residence loans

Table 4.6. Age-adjusted assets and liabilities by ethnic group – Household Economic Survey 2018 Ethnic group (1)

European mean value of the asset/ liability for those who have it (2)

Māori mean value of the asset/ liability for those who have it

Pacific peoples

mean value of the asset/ liability for those who have it

Asian mean value of the asset/liability for those who have it

Other ethnic group

mean value of the asset/ liability for those who have it

Assets

% who have this asset or liability





Owner-occupied dwellings

45% 328 24% 256 18% 302 30% 432 39% 228

Other real estate 10% 334 7% 250 3% 286 11% 426 9% 253 Other non-financial assets (3)

94% 54 85% 38 79% 22 88% 30 94% 41

Total non-financial assets

94% 238 85% 143 79% 111 90% 263 94% 152

Currency and deposits

95% 31 91% 13 90% 8 96% 33 95% 20

Pension funds 55% 39 52% 32 50% 18 45% 24 48% 35 Other household financial assets (4)

34% 604 17% 462 9% 83 20% 309 30% 460

Total financial assets 98% 253 94% 121 91% 27 97% 108 97% 169 Total individual assets

99% 474 98% 246 93% 124 99% 339 99% 309

Liabilities Owner-occupied residence loans

27% 146 18% 135 15% 160 21% 210 23% 107

Other real estate loans

5% 219 4% 179 2% 193 6% 421 5% 158

Education loans 13% 22 20% 16 20% 14 16% 19 15% 19 Other loans and liabilities (5)

51% 8 49% 9 47% 9 43% 14 42% 11

Total individual liabilities

66% 88 62% 61 60% 62 62% 130 58% 65

(1) Respondents could select more than one ethnic group (2) Values are in thousands of New Zealand dollars (3) Other non-financial assets include consumer durables, valuables and other household non-financial assets (4) Other financial assets include bonds and other debt securities, equity in own unincorporated enterprises, shares and other equity, mutual funds and other investment funds, life insurance funds and annuities, and other household financial assets (5) Other loans and liabilities include consumer durable loans, other investment loans, and other loans and liabilities.

4.6. Health and net worth

Among those aged 65 and over, those who rate their health better tend to have higher net worth.

Some, but not all, of this correlation can be explained by people spending their savings (and reducing

their net worth) as they get older and sicker. Health is also linked to education; people with higher

levels of education are healthier, more likely to earn more and accumulate more assets. Nonetheless,

poor health on its own is a risk factor for financial vulnerability in retirement, because it limits potential

earnings and may increase expenses.

Fig. 4.7. Median individual net worth of people aged 65 and over, by self-assessed health status

$1,082,300

$762,200

$599,600

$513,100

$444,700

$387,700

0 200000 400000 600000 800000 1000000 1200000

Excellent health

Very good health

Good health

Fair health

Poor health

Do not know/Refused to answer

4.7. Household net worth and household size

5.7% of NZ households owe more than they own (their net worth is less than $0) (Table 4.8).

Table 4.8. Household net worth band Percentage of households

less than $0 5.70% $1 to $100,000 24.60% $100,001 to $500,000 30.10% $500,001 to $1,000,000 18.20% More than $1,500,000 21.50%

Single-parent households with dependent children have the lowest average net worth. Couple-only

households have the highest mean and median net worth compared to other household types (Fig.

4.9).

Fig. 4.9. Mean and median household net worth (thousands of dollars) by household type

4.8. Home ownership and net worth

Home owning households, even with a mortgage, have higher net worth than renters. This means

that, on average, renters are not substituting property ownership with other assets (Fig. 4.10).

618

296

332

615

31

152

171

230

131

1283

748

789

949

233

382

420

490

483

0 200 400 600 800 1000 1200 1400

Couple only (27%)

Couple with one dependent child (7%)

Couple with two or more dependent children (13%)

All other 'couples with child(ren) only' households (10%)

One parent with dependent child(ren) only (4%)

All other 'one parent with child(ren) only' households

(4%)

Other one-family households (5%)

One-person household (19%)

All other households (10%)

Median Mean

Fig. 4.10. Mean and median household net worth (thousands of dollars) by housing tenure

4.9. Older people in the labour force

Labour force participation of people aged 65 and over has been growing but is still much lower than

for those aged 45-64. The gender gap in labour force participation in the 65+ age group is greater

than in the two younger age groups (45-54 and 55-64) (Fig. 4.11 and 4.12).

408

845

39

1,014

574

1,201

124

2,035

0 500 1000 1500 2000 2500

Dwelling owned or partly owned by usual resident(s)

who make mortgage payments

Dwelling owned or partly owned by usual resident(s)

who do not make mortgage payments

Dwelling not owned by usual resident(s)

Dwelling held in a family trust by usual resident(s)

Household net worth by housing tenure (thousands of NZ

dollars)

Median Mean

Fig. 4.11. Labour force participation rate – male aged 45 and over

Fig. 4.12. Labour force participation rate – female aged 45 and over

Despite lower rates of labour force participation, the absolute number of women aged 50 and over

in paid employment exceeds the number of men, except for the 65+ age group.

92.2

86.6

30.4

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Labour Force participation rate - male

Male Aged 45-54 Years Male Aged 55-64 Years Male Aged 65 Years and Over

84.6

73.6

18.6

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Labour Force participation rate - female

Female Aged 45-54 Years Female Aged 55-64 Years Female Aged 65 Years and Over

Fig. 4.13. The number of people aged 50 or over receiving income from wages and salaries

(thousands of people

There is a gender gap in incomes from wages and salaries. Male median income from wages and

salaries shows a decline starting from the age of 50. Women’s income from wages and salaries is

more stable across older age groups and declines only after 65 years of age but is consistently lower

than median male income in the same age group (Fig 4.14).

98.8

109.1

92.3

104.9

71.6

72.4

54.1

46.2

0 20 40 60 80 100 120

Male aged 50-54

Female aged 50-54

Male aged 55-59

Female aged 55-59

Male aged 60-64

Female aged 60-64

Male aged 65+

Female aged 65+

Fig. 4.14. Median weekly income (dollars) from salaries and wages, by age group and sex

Among those in the labour force aged 65 and over, paid employees are the largest group but the

number of employers has been growing(Fig. 4.15). Among those aged 75 and over, the proportion of

paid employees is lower compared to 65+ and self-employment is growing (Fig 4.16).

Fig. 4.15. The size and composition of labour force aged 65 and over.

1419

928

1304

928

1247

880

930

630

0 200 400 600 800 1000 1200 1400 1600

Male aged 50-54

Female aged 50-54

Male aged 55-59

Female aged 55-59

Male aged 60-64

Female aged 60-64

Male aged 65+

Female aged 65+

13200 17500 19100

9600097200 99000

3880044500 44500

5100

51005800

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2016 2017 2018

Employer Paid Employee Self-Employed and Without Employees Unpaid Family Worker

Fig. 4.16. The size and composition of labour force aged 75 and over.

The percentage of 65+ receiving superannuation has been stable for the last two decades and is

between 96 and 98% of all 65+ who receive any taxable income. However, the proportion of those

who rely on superannuation as their only source of income has been steadily decreasing (Fig. 4.17).12

12 The graph shows only taxable sources of income and does not include investment income.

2200 2600 2100

74008200

7800

6500

74008000

1500

1500 2000

0

5000

10000

15000

20000

25000

2016 2017 2018

Employer Paid Employee Self-Employed and Without Employees Unpaid Family Worker

Fig 4.17. Proportion of income from superannuation by year.

The proportion of 65+ who receive income from wages and salaries has been increasing and is over

16% (Fig. 4.18). Among those who receive income from wages and salaries, the proportion of those

who derive less than 10% of income, or 10-24% of all income, from wages and salaries has been

decreasing. This indicates that 65+ are increasingly working more hours or in better paid jobs (Fig

4.19).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Superannuation - proportion of all income of 65+

Less than 10% of all income 10% - 24% of all income 25% - 50% of all income

51% - 75% of all income 76% - 99% of all income 100% of all income

Fig. 4.18. Percentage of people aged 65 and over receiving income from wages and salaries, by year.

Fig. 4.19. Percentage of income from wages and salaries among 65+ who receive income from wages

and salaries.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20172016

20152014

20132012

20112010

20092008

20072006

20052004

20032002

20012000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2017

2016

2015

2014

2013

2012

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2005

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The percentage of 65+ who receive income from self-employment has also been growing, although

more slowly and was affected by the GFC. For those in self-employment, it is mostly a source of

income that supplements their income from other source(s), with a minority receiving more than

half of their income from self-employment.

Fig. 4.20. Percentage of 65+ who receive income from self-employment.

Fig. 4.21. Percentage of income from self-employment among 65+ who receive income from self-

employment

0%

2%

4%

6%

8%

10%

12%

14%

201720162015201420132012201120102009200820072006200520042003200220012000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000



data report for the review of retirement income policies...my/our retirement, but i can afford...

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